[TonyPrep]

I'm confused, too.

The February STEO is out and the December consumption figure is not much changed, only slightly less than 4 mbpd above production.

January's figures are better, but consumption is still almost 1.5 mbpd above a declining production. So consumption has significantly exceeded production for the last 4 months, according to the EIA. But oil prices are still low. What gives?

[ROCKMAN]

Just a WAG on my part Tony but maybe the sellers are still in such a panic they're not trying to boost the price even though the buyer are still showing up regularly. Sounds silly I know but I've seen it happen in other markets before.

As others have mentioned pricing at the margins can be volatile. A little over or under supply (or the impression there of) can have a big impact. Just read elsewhere that one of the great (and highly accurate) gurus of pricing forecasts is calling for crude to double to $80/bbl by year end. And this is the same guy that predicted (in January '08) that oil prices would crash in the 4Q '08.

[Bas]

$this->bbcode_second_pass_quote('misterno', '
')
I am totally confused...

[misterno]

So you are saying 88.4 consumption is partially came from stocks, did I understand it right?

[yesplease]

$this->bbcode_second_pass_quote('TonyPrep', 'J')anuary's figures are better, but consumption is still almost 1.5 mbpd above a declining production. So consumption has significantly exceeded production for the last 4 months, according to the EIA. But oil prices are still low. What gives?

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', 'I')f we see another year of ~1.5mbpd great consumption than production and oil is still ~$40, then I think it warrants a what gives or two, but until then it looks like everyone is taking a wait and see look due to the global recession.

[TonyPrep]

$this->bbcode_second_pass_quote('misterno', 'S')o you are saying 88.4 consumption is partially came from stocks, did I understand it right?

[yesplease]

$this->bbcode_second_pass_quote('TonyPrep', '')$this->bbcode_second_pass_quote('yesplease', 'I')f we see another year of ~1.5mbpd great consumption than production and oil is still ~$40, then I think it warrants a what gives or two, but until then it looks like everyone is taking a wait and see look due to the global recession.

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', 'S')o far even OPEC thinks crude stocks are high...

[AirlinePilot]

The whole picture is distorted by the Cushing, OK storage IMHO. Everyone is pointing to that, and while it is a big deal, if and when any sort of demand growth continues (and I believe we are seeing the beginnings of this due to lower gas prices) that storage goes away rather quickly. Probably within just a few months with a busy summer and a few hurricanes. The Global picture with storage and imports is the important one and we just dont have good data for that. We probably never will. If things were so rosy why is India having such a hard time right at the moment? The refining picture here in the states is getting ugly also. A lot of dynamics with very little raw global data to go on.

The bottom line.....we sure haven't stopped using oil yet except probably on a marginal scale. I think the crude market is being manipulated due to the economic crisis right now also.

[kmann]

I have found that both EIA and IEA demand estimates are unreliable, and even more so in uncertain times. I don't even pay attention to them anymore.

[TonyPrep]

$this->bbcode_second_pass_quote('kmann', 'I') have found that both EIA and IEA demand estimates are unreliable, and even more so in uncertain times. I don't even pay attention to them anymore.

[kmann]

Compared with history. There are no consistantly accurate forcasts.

[TonyPrep]

$this->bbcode_second_pass_quote('kmann', 'C')ompared with history. There are no consistantly accurate forcasts.

[Micki]

This has been posted elsewhere as well but seemed very relevant for this thread so here goes;
Analysis by Rob Kirby suggests that oil reseves may have been swapped. i.e. light sweet has been swapped for poor quality and the the recipient of the light sweet has been able to supply the market with ample good quality oil thus resulting in the dramatic price drop. It would also give some explanation to all the hired tankers. And if correct, would help explain how a 4mbpd gap hasn't been an immediate issue.
This is not as far fetched as it first may sound. It has been a common way for keeping gold price down without the central banks having to book keep that gold has been sold and a way to work around wag rules.
http://news.goldseek.com/GoldSeek/1234386901.php

[TonyPrep]

$this->bbcode_second_pass_quote('Micki', 'T')his has been posted elsewhere as well but seemed very relevant for this thread so here goes;
Analysis by Rob Kirby suggests that oil reseves may have been swapped. i.e. light sweet has been swapped for poor quality and the the recipient of the light sweet has been able to supply the market with ample good quality oil thus resulting in the dramatic price drop. It would also give some explanation to all the hired tankers. And if correct, would help explain how a 4mbpd gap hasn't been an immediate issue

[Micki]

Did you click the link and read?

[yesplease]

$this->bbcode_second_pass_quote('TonyPrep', '')$this->bbcode_second_pass_quote('yesplease', 'S')o far even OPEC thinks crude stocks are high...

[yesplease]

$this->bbcode_second_pass_quote('AirlinePilot', 'T')he bottom line.....we sure haven't stopped using oil yet except probably on a marginal scale. I think the crude market is being manipulated due to the economic crisis right now also.

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', 'L')ook at the yoy numbers (STEO browser), at least what we have, for a better perspective. U.S. stocks are up by 80mbpd compared to last year and the OECD commercial inventory is up by about 25mbpd. World oil consumption is down by about 2mbpd yoy.